Allowances: Learning value of money

Parents stress importance of wise earning, spending

Rebecca and Wayne Rohrscheib believe in having their daughters, Chloe, 9 (center right), and Haddie, 4, earn “commission” as a way to teach responsibility and financial principles.
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Evansville Courier &amp; Press

Brodie Gress / Special to The Courier &amp; Press
The Klees family: dad Christopher, mom Sherri, and daughter Hadrian. They’re working the concession stands at a McGary Middle School basketball game.

EVANSVILLE, Ind. — When Christopher Klees gives his 13-year-old daughter Hadrian her weekly $10 allowance, he tells her using money has three legs: spending, saving and giving.

"Each one is its own leg and idea," he said.

An IT technician at an accounting firm, Klees wants to make sure his daughter knows how to handle money when she grows up. His approach is one backed by Ben Johnson, professor of accounting at the University of Evansville. Johnson has started teaching his 8-year-old son Carac financial literacy whenever he can.

"So that when he gets a job at 16, it won't be the first time he's dealt with money," Johnson said.

Many parents share the same concern, as reports about the nation's economy show how unpredictable money can be. But rather than bogging Hadrian with macroeconomic details, Klees believes she will be fine as long as she knows how to spend, save and give money.

SPENDING MONEY

McGary Middle School seventh-grader Hadrian likes to buy shoes with her money.

"My friends think I'm crazy because I have 30 to 40 pairs of shoes," she said.

Yet she doesn't hassle her parents for money. Instead, they've taught her to build her weekly allowances until she has enough money to buy what she wants.

"She wanted an iPod once, so she saved her money until she had enough to get it," said Sherri Klees, mother in the Klees clan.

Klees emphasized he doesn't want his daughter loosely swiping credit cards for little things when shopping, so she can avoid building up debt.

"Charging small increments is like death by a thousand cuts," he said.

Rebecca Rohrscheib, a director of the kids ministry with the One Life Network churches, tries to impart similar lessons on her 9-year-old daughter Chloe.

"She's a kid and she wants to buy everything she sees," Rohrscheib said.

Rohrscheib learned many financial tricks from courses provided by her church, such as how to budget and get rid of debt. She gives her daughter $1 per week, something she prefers to call "commission."

"I feel like it speaks to her need of the money," she said. "Commission reflects a work ethic rather than just being handed everything."

Johnson also agreed with the idea of paying children by commission. He pays Carac a bit for every chore he does rather than giving him a weekly allowance. Carac likes to save his money for video games. Johnson wants to show his son that work equates to money, though he makes sure Carac can handle the chores.

"Obviously he's not cutting the grass at age 8," Johnson said.

Hadrian does chores around the house, and if she slacks off, she and her parents negotiate on what they dock from her allowance. She's quickly learned not to slack off.

"Farmers farm for a harvest. You have to hunt to kill and eat. That goes back a thousand years ago," Klees said. "She has to understand that you have to complete your work. If you skip work, you don't get paid."

SAVING MONEY

Spending is usually the first thing people want to do with their money, children especially. But Klees has told Hadrian many times she needs to save her money.

"‘Right now you only have $10,'" Klees tells his daughter sometimes. " ‘If you want things worth more, put it aside in an envelope so you can afford those.' "

Klees learned the importance of frugality the hard way when he grew up.

"I‘ll admit I had the spending-and-charging credit card mentality when I was young. I've grown past that," he said.

"He's a good example, actually," Hadrian described her father.

Sherri Klees has noticed her daughter's growing frugality.

"Yesterday, she had $40 at the mall, but she stopped herself at $10. She doesn't like to run out," she said.

When she's older, Hadrian wants to buy a car and go to culinary school — admittedly pricier purchases. However, she plans on getting a job so her parents don't need to buy everything.

"I'll try my hardest," Hadrian said many times.

Rohrscheib also wants to impart savings onto Chloe. For now, she tells her daughter she must take her money with her if she wants to spend it, rather than letting her use a debit or credit card.

Johnson backs Rohrscheib's statement. After college, Johnson found he accumulated a debt of $12,000 through his card transactions, which he feels will only become more prominent as society marches toward a cashless culture. He seeks to keep Carac from making the same mistake.

"He doesn't grasp the fact that when I swipe money on a card for $50 of gas, that's two DS games," Johnson said. "I'm not a big fan of swiping cards. There's psychology to seeing money change hands instead of card swipes."

GIVING MONEY

Knowing how to spend and save money will help Hadrian and Chloe take care of themselves when they're older. Yet their parents focus on helping them realize how important giving money is.

"It comes from the Bible," Rohrscheib said. "We should give a part of everything we make."

"I put it in the God offering," Chloe summarized how she puts her money in the bucket passed around her church.

Rohrscheib's church donates the collected money to orphans in countries ravaged by storms, such as Myanmar and Haiti in the past. Rohrscheib makes sure her children understand where their money goes, so they know what good their money can do.

"Give first," Rohrscheib tells her children.

Johnson makes sure that Carac gives 10 percent of his money to the church. He wants Carac to be thoughtful of people less fortunate than him rather than focused on earning more money for himself. So far Carac's doing a good job.

"He's not focused on negotiating his next contract," Johnson said.

Hadrian also gives money to her church, along with her parents, which helps the church maintain its building and sponsor missions to Peru and France among 13 other countries. But Hadrian also likes to buy Christmas presents for her family and friends.

"She freely gives. We can't talk her out of it. It's something she wants to do," Klees said.

Hadrian's also started to do chores on her own without impetus from her parents, such as doing her laundry and organizing her pantry.

"There's certain things you do as a chore and things you do as part of the family, because everyone helps out," Klees said. "To give somebody something takes a lot. It feels good when you give something and not expect anything in return. I think she's developing that."

BESIDES MONEY

"But I'm not an expert," Rohrscheib frequently said. As she talked at the Eastland Mall playground, her younger daughter Haddie interrupted her by sitting on her lap. Rohrscheib hugged her, patted her head, and encouraged her to play more. Eventually, the sisters climbed up a slide and pretended to drive a truck. As clothing stores, food stands and technology outlets did business around her, Haddie was content steering her imaginary wheel.